US tariffs are increasingly pressuring the challenged petrochemicals sector and could lead to a 15% drop in the global petrochemical trade, a TotalEnergies executive told the Appec conference in Singapore on Tuesday.
“If tariffs remain in place, petrochemicals trading will see another 15% drop on top of the 34% drop it has seen in the past five years,” TotalEnergies' head of petrochemical trading, Ganesh Gopalakrishnan, told Reuters on the sidelines of Appec.
Petrochemical trading houses that do not own assets are struggling to survive, said Gopalakrishnan, adding overcapacity had led to the 34% decline in trading over the past five years.
Tariffs are also making countries more protectionist, Sanjiv Vasudeva, executive vice-president and chief market officer of Haldia Petrochemicals, told the conference.
It has become more difficult to plan investments for the short term because of overcapacity and volatility, Vasudeva said.
Tariffs are also pushing Chinese products into “our traditional markets”, said Bahrin Asmawi, chief commercial officer of Malaysia's Petronas Chemicals Group.
A rare bright spot for petrochemicals is Indian consumption, which remains good with a stable growth rate, Vasudeva said.
Reuters
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